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HIGH COURT OF RAJASTHAN (JAIPUR BENCH)
MR. JUSTICE NARENDRA SINGH DHADDHA, J
Shankar Lal - Appellant
Versus
State of Rajasthan - Respondent
CFA / 87 / 2000
Decided On : 10-02-2025
(A) Civil Procedure Code, 1908 - Sections relevant to civil suits and appeals - The plaintiff filed a suit for recovery of Rs. 1,49,490/- after participating in an auction and making the highest bid of Rs. 77,500/-, but the defendants failed to execute the conveyance deed and deliver possession. The trial court dismissed the suit, leading to this appeal. (Paras 1-3)
(B) Interest on Auction Bid - The court found that the trial court erred in dismissing the suit, as the plaintiff was entitled to interest on the bid amount due to the delay in possession. The court awarded interest at 6% per annum from the date of payment to the date of possession. (Paras 4-6)
Facts of the case:
The plaintiff participated in an auction, deposited the required amounts, but the defendants did not execute the sale deed or provide possession until ordered by the court. (Paras 1-3)
Findings of Court:
The trial court's dismissal was erroneous; the plaintiff is entitled to interest at 6% per annum on the bid amount from the date of payment to the date of possession. (Paras 4-6)
Issues: The main issues were whether the plaintiff was entitled to interest on the auction bid amount and if the trial court erred in its dismissal. (Paras 4-6)
Ratio Decidendi: The court ruled that the plaintiff was entitled to interest due to the defendants' failure to execute the sale deed and deliver possession in a timely manner, thus reversing the trial court's decision. (Paras 4-6)
Result: Appeal partly allowed.
Judgment :
1. This civil first appeal has been filed by the appellant-plaintiff (for short ‘the plaintiff’) against the judgment and decree dated 09.12.1999 passed by the Additional District and Sessions Judge No.8, Jaipur City (for short ‘the trial Court’) in civil suit No. 66/98 whereby the trial Court dismissed the suit filed by the plaintiff.
2. Brief facts of the case are that the plaintiff filed a suit against the defendants-respondents (for short ‘the defendants’) for recovery of Rs. 1,49,490/-. As per the plaint, plaintiff participated in the auction and bid of the plaintiff was highest i.e. at Rs. 77,500/-. Plaintiff deposited 1/4th amount of the bid amount (Rs. 19,375/-) on 10.12.1986 and remaining 3/4th amount was deposited on 27.04.1987 through bankers cheque but the defendants had not given the possession of the auctioned property and also not executed the conveyance deed in favour of the plaintiff. The plaintiff filed S.B. Civil Writ Petition No. 4907/1991 and this Court vide order dated 25.04.1995 allowed the writ petition filed by the plaintiff. In compliance of the said order, on 02.11.1995 defendants executed the registered sale deed in favour of the plaintiff and handed over the possession to him. An opportunity was granted by this Court vide order dated 25.04.1995 to the plaintiff to file revision petition, accordingly, the plaintiff filed S.B. Civil Revision Petition No. 68/1995. This Court vide order dated 03.01.1996 while deciding the revision petition categorically observed that plaintiff can claim interest by filing of suit.
3. Defendants filed a written statement denying the contentions of the plaintiff and categorically mentioned that disputed premises was in possession of Mangli and her son-Satya Narayan. So, on account of their possession, sale deed could not be executed. After their eviction, sale deed was executed. So, plaintiff is not entitled to get any interest because there was no condition in the auction that interest would be paid on account of delay. So, suit filed by the plaintiff be dismissed.
4. On the basis of the pleadings of the parties, the trial Court framed following issues-:
5. To prove his case, plaintiff examined himself as PW-1 and to prove their case, defendants got examined Dw-1 R L Vijay.After hearing both the parties, trial Court dismissed the suit filed by the plaintiff.
6. Learned counsel for the plaintiff submits that the trial Court has committed an error in dismissing the suit filed by the plaintiff. It is an admitted position that the plaintiff had already deposited 1/4th of bid amount on 10.12.1986 and remaining 3/4th amount was deposited on 27.04.1987. So, it was the duty of the defendants to execute the conveyance deed in favour of the plaintiff and handed over the possession of the disputed premises but they had not given the possession. So, plaintiff wrote several letters and sent notices to the defendants and after that plaintiff filed civil writ petition, in which this Court on 25.04.1995 directed the defendants to hand over the possession to the plaintiff. In compliance of the said order, on 02.11.1995 defendants executed the registered sale deed in favour of the plaintiff and handed over the possession to him. So, plaintiff is entitled to get interest @ 18% per annum from 27.04.1987 to 02.11.1995. So, the trial Court had committed an error in dismissing the suit filed by the plaintiff.
7. Learned counsel for the plaintiff has placed reliance on the judgment passed by the Hon’ble Supreme Court in the case of‘Mohd. Shariq Vs. Punjab National Bank and Ors.’ reported in 2023 LiveLaw (SC) 308 and the judgment passed by the Delhi High Court in the case of ‘Lalit Madhan and Ors. Vs. Delhi Development Authority and Ors.’ reported in 64 (1996) DLT497.
8. Learned counsel for the defendants has opposed the arguments advanced by the learned counsel for the plaintiff and submitted that trial Court rightly came to the conclusion that there was no provision for paying interest on
The plaintiff is entitled to interest on the auction bid amount due to the defendants' delay in executing the sale deed and delivering possession.
The court ruled that a bank must deliver possession after auction payment and is liable to pay interest for undue delay, emphasizing legal and equitable obligations.
The defendants wrongfully debited interest and failed to transfer possession as per the agreement; the plaintiff had not defaulted on payments.
The main legal point established in the judgment is the importance of strict compliance with auction terms and conditions, balanced with the consideration of communications and extensions provided by....
The court established that the interest awarded should not exceed 6% per annum as per Section 34 of the C.P.C. and considered the plaintiff's lack of seriousness in pressing the claim for interest.
An auction purchaser cannot claim ownership or additional payments until the auction sale is confirmed, and the 5% penalty only applies to actual amounts deposited as per CPC provisions.
Court upheld contractual interest of 18% from pre-suit period while awarding 9% future interest post-decree, reflecting equitable considerations of a commercial transaction.
Settlement deeds must respect prior court orders and creditor rights, and possession claims must consider prior judicial outcomes to uphold judicial integrity.
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